NEC (6701) AI Stock Analysis

• Market Cap: $6.71T
• Dividend Yield: 0.56%
• Average Volume (3M): 3.92M
• Price to Earnings (P/E): 32.9
• Beta (1Y): 1.07
• Revenue Growth: -0.35%
• EPS Growth: 32.66%
• Country: JP
• Employees: 105,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 14.49
• Shares Outstanding: 1,364,249,300
• 10 Day Avg. Volume: 5,176,030
• 30 Day Avg. Volume: 3,921,020
• PEG Ratio: 1.40
• Price to Book (P/B): 2.15
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 19.23
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 1.66
• Enterprise Value/Gross Profit: 5.36
• Enterprise Value/Ebitda: 13.83
• 1Y Price Target: $5,353.17
• Price Target Upside: 8.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 75 Outperform
• Price Target: ¥5,740.00 ▲(16.41% Upside)

NEC's overall stock score is driven by its strong financial performance, characterized by solid profitability and efficient operations. Technical analysis supports a positive outlook, although valuation concerns due to a high P/E ratio and modest dividend yield slightly temper the score.

NEC Business Overview & Revenue Model

Company Description

NEC Corporation operates as a provider of information and communication technology solutions in Japan and internationally. The company operates in five segments: Public Solutions, Public Infrastructure, Enterprise, Network Services, and Global. It provides systems integration services comprising systems implementation and consulting; maintenance and support services; outsourcing and cloud services; and system equipment. The company also offers network infrastructure products, including core network equipment, mobile phone base stations, optical transmission systems, and routers and switches; and services and management solutions, such as operation support system (OSS), business support system (BSS), and services. In addition, it provides safer city solutions, including public safety, digital government, and digital finance; software services for service providers, including OSS/BSS; network infrastructure comprising submarine systems and wireless backhaul; and system devices, such as display and projectors, and energy storage systems. Further, the company offers hardware products, such as servers, mainframes, supercomputers, storage products, business and personal computers, point-of-sale systems, automatic teller machines, control equipment, and wireless LAN routers; and software products, including integrated operation management, application servers, security, and database software. It serves public, healthcare, government and media, manufacturing, retail and services, telecommunications, and finance industries. NEC Corporation has collaboration with Analog Devices, Inc. to provide a 5G Network Massive MIMO Antenna Radio Unit for Rakuten Mobile. The company was formerly known as Nippon Electric Company, Limited and changed its name to NEC Corporation in April 1983. NEC Corporation was incorporated in 1899 and is headquartered in Tokyo, Japan.

How the Company Makes Money

NEC Corporation generates revenue through a diverse array of products and services across its core business segments. The company earns income from its IT services, which include systems integration, cloud services, and cybersecurity solutions, aimed at improving business operations for enterprises and governmental organizations. Additionally, NEC's network solutions segment provides telecommunications infrastructure, including mobile and fixed-line networks, which are essential for global connectivity. The electronic devices business contributes to revenue through the sale of semiconductors and related technologies. Significant partnerships with businesses and governments enhance NEC's ability to deliver comprehensive technological solutions, thereby supporting its earnings. The company's focus on innovation and R&D is also a critical factor in maintaining its competitive edge and driving financial performance.

NEC Financial Statement Overview

Summary

NEC demonstrates strong financial performance with robust profitability, a stable balance sheet, and healthy cash flow generation. The company shows efficient operations, evidenced by strong margins and cash conversion ratios. Moderate leverage and increased capital expenditures are areas to monitor, but overall financial health is solid.

Income Statement

NEC has shown robust performance with improving profitability metrics. The gross profit margin stands at 30.99% for the latest year, indicating efficient cost management. The net profit margin has increased to 5.12%, reflecting a solid bottom line. Revenue growth has been positive over the years, although there was a slight dip in the latest year. Both EBIT and EBITDA margins indicate strong operational efficiency, with an EBIT margin of 8.27% and an EBITDA margin of 12.41%.

Balance Sheet

The balance sheet of NEC shows a healthy equity base with a debt-to-equity ratio of 0.34, suggesting moderate leverage. The return on equity is 8.97%, demonstrating effective use of equity financing. With an equity ratio of 45.23%, the company maintains a balanced capital structure. However, the increase in total debt over the years warrants cautious monitoring.

Cash Flow

NEC's cash flow statement reflects strong cash generation capabilities. The free cash flow has grown consistently, with a free cash flow to net income ratio of 1.24, highlighting robust cash earnings relative to net income. The operating cash flow to net income ratio of 1.97 further underscores healthy cash conversion from operations. The trajectory of free cash flow growth is positive, though capital expenditures have increased, which may impact future free cash flow if not managed.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.42T	3.42T	3.48T	3.31T	3.01T	2.99T
Gross Profit	1.06T	1.06T	1.01T	958.25B	886.41B	861.18B
EBITDA	411.14B	422.03B	382.92B	356.76B	330.96B	331.06B
Net Income	175.18B	175.18B	149.52B	114.50B	141.28B	149.61B
Balance Sheet
Total Assets	4.32T	4.32T	4.23T	4.04T	3.82T	3.73T
Cash, Cash Equivalents and Short-Term Investments	584.62B	584.62B	476.49B	419.46B	430.78B	523.35B
Total Debt	666.36B	666.36B	573.64B	608.48B	597.38B	702.86B
Total Liabilities	2.24T	2.24T	2.14T	2.13T	2.04T	2.16T
Stockholders Equity	1.95T	1.95T	1.92T	1.62T	1.51T	1.31T
Cash Flow
Free Cash Flow	218.00B	218.00B	171.46B	74.41B	76.41B	203.97B
Operating Cash Flow	344.41B	344.41B	271.23B	152.13B	147.52B	274.91B
Investing Cash Flow	-242.17B	-242.17B	-76.02B	-49.59B	-63.38B	-87.49B
Financing Cash Flow	7.03B	7.03B	-155.51B	-122.79B	-189.62B	-33.61B

NEC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4931.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6701, the sentiment is Positive. The current price of 4931 is above the 20-day moving average (MA) of 4692.96, above the 50-day MA of 4573.13, and above the 200-day MA of 3616.70, indicating a bullish trend. The MACD of 112.68 indicates Negative momentum. The RSI at 59.35 is Neutral, neither overbought nor oversold. The STOCH value of 80.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6701.

NEC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6701	75 Outperform	$6.71T	32.89	10.52%	0.56%	-0.35%	32.66%
3626	72 Outperform	¥1.13T	21.85	―	1.44%	4.39%	7.80%
6702	72 Outperform	$7.07T	18.33	11.82%	0.75%	-8.36%	45.42%
4307	70 Outperform	$3.26T	33.72	23.37%	1.08%	3.28%	16.48%
9719	66 Neutral	¥1.35T	27.50	―	1.94%	33.00%	21.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
9613	61 Neutral	$5.56T	39.07	7.93%	0.63%	3.73%	11.64%

NEC Corporate Events

NEC Restructures Fire and Disaster Prevention Business

NEC Corporation is restructuring its fire and disaster prevention business through a series of corporate splits involving its wholly-owned subsidiaries. This strategic move aims to strengthen NEC’s business foundation in the digital transformation and social infrastructure domains by transferring operations to NEC Networks & System Integration Corporation. The reorganization is part of NEC’s broader plan to streamline its operations and enhance its market positioning in domestic regions.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen3500.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Reports Strong Financial Recovery in Q2 2025

NEC Corporation reported a significant improvement in its financial performance for the three-month period ending June 30, 2025, with a notable increase in revenue and operating profit compared to the previous year. The company’s strategic initiatives, including a share split, have positively impacted its financial stability and market positioning, reflecting a strong recovery and growth trajectory.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen2340.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Announces Segment Revisions for Enhanced Financial Clarity

NEC Corporation has announced a revision of its organizational segments, effective from April 1, 2025. This change will be reflected in the company’s consolidated financial results starting from the first quarter of the fiscal year ending March 31, 2026. The reorganization aims to streamline operations and potentially improve financial transparency and performance, impacting stakeholders by clarifying the contribution of acquired companies to NEC’s overall earnings.

The most recent analyst rating on (JP:6701) stock is a Buy with a Yen3120.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Records Gains from Retirement Benefit Trust Assets

NEC Corporation announced the recognition of gains from the return of overfunded retirement benefit trust assets, amounting to 140,000 million yen, with a recorded gain of 52,700 million yen as extraordinary income for the fiscal year ending March 31, 2026. This financial maneuver is expected to have no impact on NEC’s consolidated financial results, as they adhere to International Financial Reporting Standards (IFRS), but it highlights the company’s strategic management of its financial resources.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen11700.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Announces Corporate Restructuring to Enhance Competitiveness

NEC Corporation has announced a corporate restructuring involving a simplified absorption-type split, transferring shares of its subsidiaries, NEC Nexsolutions, Ltd. and NEC Networks & System Integration Corporation, to NESIC Holdings, Ltd., a wholly-owned subsidiary. This strategic move aims to enhance competitiveness, improve management efficiency, and facilitate rapid decision-making, aligning with NEC’s broader business reorganization strategy to strengthen its market position and operational capabilities.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen11700.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Announces Increased Year-End Dividend and Share Split

NEC Corporation announced a decision by its Board of Directors to distribute dividends to shareholders, with a year-end dividend of 70 yen per share, totaling 18,683 million yen. This decision reflects an increase from the previous year’s dividend, highlighting NEC’s financial stability and commitment to rewarding its shareholders. The announcement also noted a share split effective April 1, 2025, which impacts the calculation of dividends for fiscal years 2024 and 2025. This move is likely to enhance NEC’s market position and shareholder value, while also adapting to market conditions and strategic growth plans.